Your success in a market depends on how much better you establish your product position versus your competitors. This would be easy if all you had to do was figure out how to communicate your product’s key features and benefits, coin a clever slogan, and buy advertising.
But, it’s not that easy. You have to understand and communicate your product’s specific differences and how those differences deliver value better than the competition.
If you master this process, you can define the competitive landscape and drive the competition to spend all their time defending themselves against the positions you’ve established.
The Nature of Capital Equipment Positioning
A product position is defined as the unique place your product occupies in the mind of your customer. The goal is to make that position so effective that it compels that customer to make purchasing decisions in your favor.
It’s important to note that creating positions for capital equipment is a lot different than creating positions for consumer goods.
With consumer goods, buyers are not typically very interested in detailed performance comparisons when selecting products, nor do they take the time to assess them. As a result, positioning consumer goods on intangibles such as industry leadership, quality, and service can be very effective.
However, in the world of capital equipment, buyer behavior is different. Here buyers are buying to maximize profit and suppliers are evaluated on their ability to help them do it.
Their buying processes are formal and analytical. Multiple suppliers are often evaluated side by side through demonstrations and performance data reviews. Several capital equipment markets even have formal cost of ownership models that standardize the evaluation criteria.
This doesn’t mean that you should ignore intangibles when positioning. It does mean, however that you must connect your position directly to your value proposition and then prove it.
4 Rules for Defining Your Product Position
The good news is you only need to follow four simple rules to define effective product positions for capital equipment. Your product positions must be:
In capital equipment the purchasing process is very formal, and you can expect to be asked for data and to conduct live demonstrations to prove your claims. Empty claims are quickly exposed.
By definition a position is the unique place you occupy in the market relative to your competitors. If you can attribute your position to a specific product feature that your competition doesn’t have and cannot imitate, you passed the “unique” test. This could be related to architecture, technology or process.
3. Directly connected to your value proposition
At the end of the day what matters is creating financial value. You need to be able to draw a direct connection between your position and a unique ability to make profit for your customers.
4. Important to the buying decision
Ultimately you want your product position to lead to purchase orders. Therefore, the positions you take must directly impact factors that are important to the buying decision. For example, positioning on a unique ability to achieve high production yields is likely a more effective position than touting the quality of your user documentation.
Once you’ve created a position that satisfies the four rules above, you’re ready craft your positioning statement and begin the tough work of establishing that position in the market.